Mar 9 AHIP's 11th hour salvo: $1 million in TV ads

There are lots of fights on health reform. Between the left and the right. Within the left - the I'm-more-liberal-than-you fight. The fight about whether the President is selling us down the river. Tons of fights to claim the mantle of the true health reformer. In the mean time, the focus got lost. We were so damn busy accusing each other of siding with insurance companies, we forgot the real enemy that was siding with insurance companies. You know, the actual insurance companies.

And in the midst of it all, they have been regrouping, rethinking, and re-inventing ways to stop health reform. Regardless of whether or not you believe what's on the table now is real health reform, they certainly do. And they are going to spend a million dollars running ads on TV to prove it.

Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said insurance industry workers "do not deserve to be vilified for political purposes. ... For every dollar spent on health care in America, less than one penny goes toward health plan profits. The focus needs to be on the other 99 cents." AHIP plans to spend more than $1 million to run television ads on cable stations nationwide beginning in the next few days to push back on the attacks on insurers.

Aww. Poor, poor health insurance companies. Who is going to think of the poor insurance companies! First of all, let's put the lies about 1% going to profits to rest. Last year, the top 5 health insurance companies made $12.2 billion in profits alone, up 56% from the previous year. In a recession. That insurance companies spend a gigantic amount in overhead, such as executive salary, paperwork, employing people to try to find ways to rescind policies, advertising, etc. that's not profit is not someone else's fault. Second, here is the real number you need to look at: the insurance company waste. The Main Street Alliance released a report in December of 2009 showing that merely 17 years ago, insurance companies spent nearly 95% of the premiums they received on actual Medical care. Today, according to PricewaterhouseCoopers, the average for the largest insurers is about 80%. But that's not the worst part.

Although the PricewaterhouseCoopers study gives an average for major investor owned insurance companies, other studies have found that in the individual and small group markets smaller insurers routinely have medical loss ratios that are much lower. A recent study of these markets found many as low as 60 percent.

Remember that these people - small businesses who buy insurance in the small group market and individuals who either cannot afford coverage or pay exorbitant rates in the individual market need the most help. Large group MLR may not rise as much from the status quo, they buy in volume, and the savings realized would also be in volume. Reform would mandate these rates to rise to 85% for large group markets and 80% for small group markets. And that alone is enough to drive them crazy. In his report about Wendell Potter, Ezra Klein noted in June of last year that

as Potter explains, he's watched an insurer's stock price fall by more than 20 percent in a single day because the first-quarter medical-loss ratio had increased from 77.9 percent to 79.4 percent.

That's not all, last Friday, Ezra also got a hold of an internal assessment of how Wellpoint stock would be affected should reform fail.

"Of course, healthcare reform is a double-edged sword for Wellpoint shares. Should reform fail, Wellpoint would be a primary beneficiary."

Insurance companies do not want reform of any kind. They want the process to die. Why, because if that happens, they would be the primary beneficiary.

What else are they afraid of?

Wellpoint's "2.2 million individual members do leave it somewhat exposed to the 80% individual [Medical Loss Ration] floor contemplated in the Senate bill and Federal oversight of rating action proposed by the President," continues the analysis. In English, that means the bill will force Wellpoint to spend at least 80 cents of every premium dollar on medical care for its customers, and it means that regulators aren't likely to let Wellpoint jack prices up by 25 percent with no warning or reason.

Should insurance companies be concerned about this? Of course they should be. This is going to cut into their bottom line - especially a company like Well Point, that does so much business screws so many people over in the individual market. One of the basic ideas of the reform proposal on the table now is to legally mandate a minimum medical loss ratio and give people and businesses in the toughest situations (small businesses and individuals) bargaining power. If consumers have bargaining power, the insurance companies have to compete. They, of course, don't like it. They don't want anything to have to do with it. They have no better friend than the status quo. And they are perfectly happy to have us liberals quarrel amongst ourselves if that's successful in stalling (and killing) reform.

That is why the insurance industry is adding another million. Mind you, that's merely chump change to the $173 million that the insurance industry spent directly by August of last year, laundering money through the Chamber of Commerce and other ways. It's probably also chump change compared to the amount they are still spending lobbying, funding fake-grassroots groups and jacking up the anger meter of Americans.

Insurance companies still think there is a chance to derail reform. They still think there's a chance they could go on perpetuity denying coverage to people because of pre-existing conditions, or dropping people from the rolls just as soon as they get sick. They still think that if they play their cards right, they will be able to continue to shrink their consumer base and balloon their profits. They still believe that they can buy enough members of Congress, gin up enough faux outrage, and scare enough people to stop reform.

There is only thing that stands between them and the preservation of the status quo. You. Me. Us. We need to push back. And yes, we can push back. They have a $1 million a day to pour into this. Do we have 5 minutes everyday to make some calls to our members of Congress and tell them to push reform through? I think we do. I think we are damn close. I think we are going to do this. But only if all of us do it together. We need to all get behind the President's leadership on this and push. This is us vs. them. They are the insurance giants who would like to keep things as is. We are the ones that are going to push reform past the finish line.

Let's do this! Go to House.gov and Senate.gov and contact your members. I have had indications that contacting their local office (especially if they are your rep) has a better impact than calling their DC office - or at the least, you get a better ear. Here are the numbers to the Capitol Switchboard if you must call their DC office: 1-866-338-1015, 1-866-220-0044, 1-866-311-3405. Get busy.